The Employment (Amendment) (No.2) Ordinance comes into force on 19 October 2018 and finally gives some (albeit small and blunt) teeth to an under used part of the Employment Ordinance – the remedy of ‘reinstatement’ or ‘re-engagement’.
What is ‘reinstatement’ or ‘re-engagement’?
- Reinstatement requires an employer to treat an employee as if they had never been dismissed.
- Re-engagement requires an employer to re-engage an employee in a comparable or otherwise suitable role (e.g. a similar role within another division of the organisation).
When can an order for reinstatement or re-engagement be made?
Currently, if an employee is unreasonably AND unlawfully dismissed, they can ask for an order for reinstatement or re-engagement. However, the Tribunal is only empowered to make such an order if both parties consent. Unsurprisingly, after being successfully sued by a former employee, few employers are prepared to consent that employee re-joining the workforce.
The current requirement for consent essentially makes the remedy worthless.
The effect of the Amendment is to remove the need for an employer’s consent as a pre-requisite for the making of an order for reinstatement or re-engagement. This does not, however, mean that the remedy will be automatically ordered. In addition to considering the wishes of the former employee, the Tribunal must also have regard to the impact on the employer. An order should only made if the Tribunal considers it to be appropriate and practicable. If an employer is ordered to reinstate or re-engage an employee, but fails to do so, a penalty is payable to the employee of three times the employee’s average monthly wages up to a maximum of HK$72,500.
Practical consequences for employers and employees
While the Amendment potentially increases the remedies available to former employees, we doubt it will have a significant impact on employers or greatly benefit employees.
The employee must overcome a number of hurdles before an order can be considered, not least succeeding in claims before the Labour Tribunal for both unreasonable dismissal and unlawful dismissal.
The Amendment brings the legislation somewhat in line with the reinstatement or re-engagement laws in the UK, where the remedy has been available without the need for an employer’s consent for over 20 years. During that time, very few orders have been made largely due to the requirement for such order to be appropriate and practicable.
Orders for reinstatement or re-engagement tend to be limited to employees working in the public sector or those from major private sector employers, who have sufficient size and resources for any order to be considered appropriate and practicable.
In Hong Kong such employers are few and far between and we expect that they would prefer to pay the penalty than actually reinstate or re-engage a former employee.
This article is for information purposes only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances.